LABOR LAW AND SOCIAL LEGISLATION
1st Semester, 2023-2024
I. FUNDAMENTAL PRINCIPLES AND CONCEPTS
A. Introduction
1. LABOR – simply means physical toil.
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It could also mean productive work, especially work done for wages.
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May refer to a social class comprising those who do manual labor or
work for wages.
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In classical and all microeconomics, LABOR is one of the four factors of
production, the others being land, capital, and enterprise.
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It is a measure of the work done by human beings.
2. LABOR STANDARDS LAWS – refer to the minimum requirements prescribed
by existing laws, rules, and regulations relating to wages, hours of
work, cost of living allowance, and other monetary and welfare
benefits, including occupational, safety and health standards.
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Refer to the laws, rules, and regulations that set the minimum
requirements for terms and conditions of employment, such as wages,
hours of work, etc.
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Covered by Books I to IV of the Labor Code.
3. LABOR RELATIONS LAWS – the laws, rules and regulations which govern the
relationship between employees and their employers, promote the
right of the employees to self-organization and collective bargaining,
penalize unfair labor practice, and provide modes for the settlement of
labor disputes such as conciliation, mediation, grievance machinery,
voluntary arbitration, and compulsory arbitration.
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covered by Books V to VII of the Labor Code.
4. LABOR LAWS – directly affect employment, they directly govern effects of
employment.
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All labor laws are social legislations. But not all social legislations are
labor laws.
5. SOCIAL LEGISLATIONS – are laws, rules and regulations that promote welfare
of all sectors of society.
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Includes laws that provide particular kinds of protection or benefits to
the society, in furtherance of social justice.
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Not all social legislations are labor laws.
BATONG BUHAY GOLD MINES, INC. v. HON. DIONISIO DELA SERNA, et al.
FACTS: Private respondents filed a complaint against Batong Buhay (BBGMI) for
nonpayment of their basic pay and allowances, 13th month pay, and other benefits.
Complainants then filed a motion for the issuance of an inspection authority. The Labor
Standards and Welfare Officers submitted their report recommending for the issuance of an
Order of Compliance to direct BBGMI to pay complainants for the unpaid salaries, benefits
and allowances. The Regional Director 1 adopted the same recommendation. Complainants
then filed an ex-parte motion for the issuance of a writ of execution. The Regional Director
directed petitioner to put up a cash or surety bond otherwise, a writ of execution will be
issued. Failure of respondent to post a bond, a writ of execution was issued directing the
Special Sheriff to collect said amount from petitioner otherwise attach goods and chattels
of petitioner. The Special sheriff seized three (3) units of Peter built trucks and sold it by
public auction. Petitioner filed a bond which in result, restrained complainants and sheriff
from enforcing the writ of execution. BBGMI appealed the Order of Regional Director Piezas
to respondent Undersecretary dela Serna contending that the Regional Director had no
jurisdiction over the case. However, undersec dela Serna uphold the jurisdiction of the
Regional Director and annulled all auction sales conducted by the special sheriff. An MR was
filed but was denied. Petitioner alleged that the Regional Director is without jurisdiction over
subject case in line with the ruling in Zambales Base vs. Minister of Labor. Respondent
Undersec dela Serna upheld the jurisdiction of the Regional Director relying on E.O. 111
considering that there still exists an employer-employee relationship between the parties
and that the case involves violation of labor standard provisions of labor code.
ISSUE: Whether the Regional Director has jurisdiction over the subject labor standards
case.
HELD: Yes, the Regional Director has jurisdiction to hear and decide the instant labor
standard case. Labor standards refers to the minimum requirements prescribed by existing
laws, rules and regulations relating to wages, hours of work, cost of living allowance, etc. This
is a labor standard case and is governed by Art. 128 of the Labor code as amended by E.O.
111. The amendment of the visitorial and enforcement powers of the Regional Director
(Article 128(b)) by said E.O. 111 reflects the intention enunciated in Policy Instructions Nos.
6 and 37 to empower the Regional Directors to resolve uncontested money claims in cases
where an employer-employee relationship still exists. This intention must be given weight
and entitled to great respect. Exception clause in Art. 128:(a) that the petitioner (employer)
contests the findings of the labor regulations officer and raises issues thereon;(b) that in
order to resolve such issues, there is a need to examine evidentiary matters; and(c) that such
matters are not verifiable in the normal course of inspection. Petitioner did not raise any of
these grounds. Petitioner put up a defense that the Regional Director was without
jurisdiction, there being no employer-employee relationship, since petitioner had ceased
doing business since 1985.
Regional Director’s visitorial and enforcement powers under Art. 128 (b) has undergone
series of amendments. The enactment of RA 6715subjected the power of the Regional
Director to adjudicate employee money claims. The Servando ruling expanded the
jurisdictional limitation provided for by RA 6715 to include labor standards cases under Art.
128 (b) and not only to ordinary monetary claims under Art.129. The Servando ruling was
eventually rendered inapplicable with the enactment of Republic Act 7730, the
law governing the visitorial and enforcement powers of the Labor Secretary.
RA 7730 can be considered a curative statute to reinforce the conclusion that the Regional
Director has jurisdiction over the present labor standards case. Well-settled is the rule that
jurisdiction over the subject matter is determined by the law in force when the action was
commenced, unless a subsequent statute provides for its retroactive application,
as when it is a curative legislation.
The Court ruled that RA 6715 is deemed a curative statute and should be applied to pending
cases. The rationale of the ruling of the Court was that prior to RA 6715, Article 217 as
amended by E.O. 111, created a scenario where the Labor Arbiter and the Regional Director
of DOLE had overlapping jurisdiction over money claims. Such a situation was viewed as
a defect in the law so that when RA 6715 was passed, it was treated or interpreted by the
Court as a rectification of the infirmity of the law, and therefore curative in nature, with
retroactive application. RA 7730 reveal that “this bill seeks to do away with the jurisdictional
limitations imposed in the Servando ruling and to finally settle doubts on the visitorial and
enforcement power of the Sec. of Labor and Employment.” Petition is granted. “The
worker need not litigate to get what legally belongs to him, for the whole enforcement
machinery of the Department of Labor exists to insure its expeditious delivery to him free of
charge.”
B. Sources of Labor Laws
1. 1987 CONSTITUTION
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Art. II, Sec. 10; Art. II, Sec. 18; Art. XII, Sec. 12; Art. XIII, Sec. 1; Art. XIII,
Sec. 3; and Art. XIII, Sec. 14
2. CIVIL CODE
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Contract of Labor: Article 1700 to Article 1710
3. LABOR CODE
4. DEPARTMENT OF LABOR AND EMPLOYMENT ISSUANCES
5. JURISPRUDENCE
C. State Policies
1. Labor as Primary Social Economic Force (Constitution, Art. II, Sec. 18)
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The State affirms labor as a primary social economic force. It shall
protect the rights of workers and promote their welfare.
2. Full Protection to Labor (Constitution, Art. XIII, Sec. 3)
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The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organizations and
peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions
of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production
and the right of enterprises to reasonable returns on investments, and
to expansion and growth.
3. Security of Tenure (Constitution, Art. XIII, Sec. 3)
4. Social Justice (Constitution, Art. II, Sec. 10; Labor Code, Art. 218, as
renumbered by DOLE D.A. No. 01-2015)
5. Equal Work Opportunities (Constitution, Art. XIII, Sec. 3; Labor Code, Art. 3)
6. Right to Self-Organization and Collective Bargaining (Constitution, Art. XIII,
Sec. 3; Labor Code, Arts. 3 and 253)
7. Construction in Favor of Labor (Labor Code, Art. 4; Civil Code, Art. 1702)
CASES:
1. MANILA ELECTRIC CO. VS. QUISUMBING, GR NO. 127598, JANUARY 27, 1999
FACTS:
In 1999, the SC promulgated a decision directing the parties to execute a CBA
providing for an increase in wages and retroactive application of Arbitral awards.
Meralco filed this petition arguing that an increase in wages will result in higher
electricity rates which will be passed to the consumers. The union likewise asked for
a reconsideration from the Court's decision which denied the benefit of being
granted a loan to set up a cooperative. It likewise questioned the Court's decision
which granted Meralco the right to contract out jobs without consulting the Union.
ISSUES:
1. WON an increase in wages will result in higher electricity rates;
2. WON the grant of arbitral awards is retroactive;
3. WON the union may demand a loan to set up a cooperative
4. WON it is valid to contract out jobs without the need to consult the union.
RULING:
1. This is a non-sequitur. Any increase in the prices of electricity requires the approval
of the appropriate govemment agency and does not result from a mere increase in
wages. However, collective bargaining disputes require proper balancing of the
interests of the parties to the dispute and those who might be affected by the
dispute. Neither party should act against the other or impair the interest or
convenience of the public.
2. CBA arbitral awards granted after six (6) months from the expiration of the CBA,
shall retroact to such time agreed upon by the parties. Absent such agreement as to
retroactivity, the award shall retroact to the first day after the six-month period
following the expiration of the last CBA, should there be any. In the absence of a CBA,
the Secretary of Labor exercising his discretionary powers, shall determine the date
of retroactivity of the arbitral awards.
3. Providing seed money to set up a cooperative is not a basic necessity such as
housing loan and a matter in which the employer has no legal obligation.
4. The employer is allowed to contract out services for six months or more. However,
the employer should at least inform its employees of its decision or modes of action
to attain a harmonious labor-management relationship. While there should be
mutual consultation, eventually hiring of workers is a valid exercise of management
prerogative subject only to special laws and agreements on the matter and the fair
standards of justice.
2. AGABON VS. NLRC / RIVIERA HOME - GR NO. 158693
FACTS:
Petitioners were employed by Riviera Home as gypsum board and cornice installers
from January 1992 to February 23, 1999 when they were dismissed for abandonment
of work. Petitioners filed a complaint for illegal dismissal and was decided in their
favor by the Labor Arbiter. Riviera appealed to the NLRC contending just cause for
the dismissal because of petitioner’s abandonment of work. NLRC ruled there was
just cause and petitioners were not entitled to backwages and separation pay. The
CA in turn ruled that the dismissal was not illegal because they have abandoned their
work but ordered the payment of money claims.
ISSUE:
Whether or not petitioners were illegally dismissed.
RULING:
To dismiss an employee, the law required not only the existence of a just and
valid cause but also enjoins the employer to give the employee the right to be heard
and to defend himself. Abandonment is the deliberate and unjustified refusal of an
employee to resume his employment. For a valid finding or abandonment, two
factors are considered: failure to report for work without a valid reason; and, a clear
intention to sever employer-employee relationship with the second as the more
determinative factor which is manifested by overt acts from which it may be deduced
that the employees has no more intention to work.
Where the employer had a valid reason to dismiss an employee but did not
follow the due process requirement, the dismissal may be upheld but the employer
will be penalized to pay an indemnity to the employee. This became known as the
Wenphil Doctrine of the Belated Due process Rule.
Art. 279 means that the termination is illegal if it is not for any of the justifiable
or authorized by law. Where the dismissal is for a just cause, the lack of statutory due
process should not nullify the dismissal but the employer should indemnify the
employee for the violation of his statutory rights. The indemnity should be stiffer to
discourage the abhorrent practice of “dismiss now, pay later” which we sought to
deter in Serrano ruling. The violation of employees’ rights warrants the payment of
nominal damages.
3. JAKA FOOD PROCESSING VS. PACOT - GR NO. 151378
FACTS:
Respondents were hired by JAKA until their termination on August 29, 1997 because
the Corporation was “in dire financial straits”. It was not disputed that they were
terminated without complying with the requirement under Art. 283 of the Labor
Code regarding the service of notice upon the employees and DOLE at least one
month before the intended date of termination.
ISSUE:
Whether or not full backwages and separation pay be awarded to respondents when
employers effected termination without complying with the twin notice rule.
RULING:
The dismissal of the respondents was for an authorized cause under Article 283. A
dismissal for authorized cause does not necessarily imply delinquency or culpability
on the part of the employee. Instead, the dismissal process is initiated by the
employer’s exercise of his management prerogative, i.e. when the employer opts
to install labor-saving devices, when he decides to cease business operations or
when… he undertakes to implement a retrenchment program.
Accordingly, it is wise to hold that:
1) if the dismissal is based on a just cause but the employer failed to comply with the
notice requirement, the sanction to be imposed upon him should be tempered
because the dismissal was initiate by an act imputable to the employee.
2) if the dismissal is based on an authorized cause but the employer fails to comply
with the notice requirement, the sanction should be stiffer because the dismissal
process was initiated by the employer’s exercise of his management prerogative.
Thus, dismissal was upheld but ordered JAKA to pay each of the respondents the
amount of PhP50,000.00 representing nominal damages for non-compliance with
statutory due process.
4. ABBOT LABORATORIES VS. ALCARAZ, GR NO. 192571, JULY 23, 2013
FACTS:
Abbott caused the publication in a major broadsheet newspaper of its need for a
Regulatory Affairs Manager, indicating therein the job description for as well as the
duties and responsibilities attendant to the aforesaid position. Alcaraz signed an
employment contract which specifically stated, inter alia, that she was to be placed
on probation for a period of six (6) months beginning February 15, 2005 to August
14, 2005. On the day Alcaraz accepted Abbott's employment offer, Bernardo sent
her copies of Abbott's organizational structure and her job description through email. She also had undergone a pre- employment orientation and training program
as part of her orientation.
In May, Alcaraz was informed and asked to tender her resignation or they be forced
to terminate her services because she failed to meet the regularization standards.
She then filed a complaint for illegal dismissal and damages against Abbott and its
officers.
She claimed that she should have already been considered as a regular and not a
probationary employee given Abbott's failure to inform her of the reasonable
standards for her regularization upon her engagement as required under Article 295
of the Labor Code.
The LA dismissed Alcaraz's complaint for lack of merit because she was unable to
meet the standards set by Abbott as per her performance evaluation, the termination
of her probationary employment was justified. The NLRC reversed the findings of the
LA and ruled that there was no evidence showing that Alcaraz had been apprised of
her probationary status and the requirements which she should have complied with
in order to be a regular employee. The CA affirmed the ruling of the NLRC.
ISSUE/S:
1. Whether or not Alcaraz was sufficiently informed of the reasonable standards to
qualify her as a regular employee;
2. Whether or not Alcaraz was validly terminated from her employment;
RULING:
1. YES. Alcaraz was well-aware that her regularization would depend on her ability
and capacity to fulfill the requirements of her position as Regulatory Affairs Manager
and that her failure to perform such would give Abbott a valid cause to terminate
her probationary employment.
A probationary employee, like a regular employee, enjoys security of tenure.
However, in cases of probationary employment, aside from just or authorized causes
of termination, an additional ground is provided under Article 295 of the Labor Code,
i.e., the probationary employee may also be terminated for failure to qualify as a
regular employee in accordance with the reasonable standards made known by the
employer to the employee at the time of the engagement.
2. YES. Despite the existence of a sufficient ground to terminate Alcaraz's
employment and Abbott's compliance with the Labor Code termination procedure,
it is readily apparent that Abbott breached its contractual obligation to Alcaraz when
it failed to abide by its own procedure in evaluating the performance of a
probationary employee thus, warrants for the payment of nominal damages.
A company policy partakes of the nature of an implied contract between the
employer and employee. Hence, given such nature, company personnel policies
create an obligation on the part of both the employee and the employer to abide by
the same.
Records show that Abbott's PPSE procedure mandates, inter alia, that the job
performance of a probationary employee should be formally reviewed and
discussed with the employee at least twice; Abbott is also required to come up with
a Performance Improvement Plan during the third month review to bridge the gap
between the employee's performance and the standards set, if any. In addition, a
signed copy of the PPSE form should be submitted to Abbott's HRD as the same
would serve as basis for recommending the confirmation or termination of the
probationary employment.
Abbott failed to follow the above-stated procedure in evaluating Alcaraz. Case law
has settled that an employer who terminates an employee for a valid cause but does
so through invalid procedure is liable to pay the latter nominal damages.
The contract is the law between the parties and thus, breaches of the same impel
recompense to vindicate a right that has been violated. Consequently, while the
Court is wont to uphold the dismissal of Alcaraz because a valid cause exists, the
payment of nominal damages on account of Abbott's contractual breach is
warranted in accordance with Article 2221 of the Civil Code.